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Chinese shares looking good

June 21, 2022

We don’t have a Coppock buy signal for Futu Holdings yet but this is a good looking chart and Futu fully qualifies under my two out of three ain’t bad rule. The Coppock is also flattening out after a steep decline and the latest reading is minus 100 so if it does turn up which I expect then we will have a high-powered 3B buy signal. I have been adding to my stake in Futu in the hope that there could be exciting times ahead. This is in my spread betting account with five times leverage so, as usual, I am really going for it.

I had a garden designer once who told me to do whatever I do as though I meant it so that’s what I do. If you don’t believe in a share enough to pile in you maybe don’t believe. Although, in this case it is not so much about belief as about the chart. The corollary (my favourite brain teaser word) to selling shares when the indicators turn down is buying them when they turn up. Mr Spock would approve.

Once we have decided to buy or in my case started building a position we naturally become more interested in the fundamentals. Is there any clue as to why Futu has got the best looking chart in the whole Quentinvest list?

The shares jumped 20pc after the company reported its Q1 2022 results. They were good and obviously well received by the stock market. Futu still seems to be a company at an early stage in a period of explosive growth. In effect what has happened is that the shares ran way to high on a frenzy of momentum buying and the company has been somewhat affected by the stock market collapse since last November. It is a stockbroking business after all.

In the circumstances they have weathered the storm in style and are rapidly gaining market share as weaker players exit the market and investors look for a better service that they get from the banks.

Do I think Futu could reach new peaks? I do and if they do I intend to profit handsomely.

Pinduoduo has an identical chart to Futu and these are presently my two favourite Chinese shares. All we need is the Coppock indicator to turn higher and we will have a classic 3B buy signal. Again the fundamentals are impressive. Pinduoduo is classic 3G apart from the chart and that bit is in process of being remedied. Both these shares look outstanding buys to me.

Futu Holdings FUTU Buy @ $51

Pinduoduo PDD Buy @ $66

Strategy

This is exciting. At last we have some hot shares to buy. I intend to use the next bull market to make a great deal of money and I am determined to take my subscribers with me. So read what I say and follow my advice.

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